Counter-Terrorism Act 2008 (Schedule 7)

Andrea Leadsom Excerpts

Tuesday 10th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

My noble friend the Commercial Secretary to the Treasury, Lord Deighton, has today made the following written ministerial statement.

Paragraph 38 of schedule 7 to the Counter-Terrorism Act 2008 requires the Treasury to report to Parliament after each calendar year in which a direction under the schedule is at any time in force. This report provides details of the Treasury’s exercise of its functions under schedule 7 during the calendar year 2013.

The schedule 7 powers

Schedule 7 provides HM Treasury with powers to implement a graduated range of financial restrictions in response to certain risks to the UK’s national interests. The risks it addresses are those posed by money laundering, terrorist financing and the proliferation of chemical, biological, radiological and nuclear weapons.

Direction given under the powers in schedule 7

The Financial Restrictions (Iran) Order 2012 (“the 2012 order”) was made and came into force on 21 November 2012, immediately on expiry of the 2011 order. The 2012 order contained a direction by the Treasury in the same terms as in the 2011 order. The decision to give the direction in the 2012 order, in effect maintaining the restrictions in the 2011 order, was made because of the continued risk to the national interests of the UK caused by the activity of Iranian banks in facilitating the development or production of nuclear weapons. The direction mitigates the risk to the financial sector of being involved in proliferation financing.

Licensing

Under paragraph 17 of schedule 7, the Treasury can exempt acts specified in a licence from the requirements of a direction requiring the cessation or limiting of transactions or business relationships between UK and Iranian banks.

Six general licences were issued by the Treasury exempting certain activities from the requirements of the 2011 order. All six licences have since been revoked and on 22 December 2012, HM Treasury issued a new General Licence 1 under article 30(2)(c) of Council regulation (EU) No. 257/2012 (“the EU regulation”). This licence permitted actions authorised under the Financial Restrictive Order 2012 to remain valid.

Specific licenses

In January 2013, three specific licences were issued, one specific licence revoked and one specific licence amended.

Two of these newly issued licenses were issued in connection with payments due by an agreement or contract concluded before the prohibitions;

One newly issued licence related to humanitarian action;

One revoked licence concerned the repayment of a loan; and

One amended licence allowed a UK bank to receive funds from a UK designated bank, amended to add the ultimate beneficiary into the licence.